Biotech Stocks Break Down, a Bad Omen

Charts look ugly for the once-hot biotech sector, which is not a good sign for the leaderless broader market.

Every bull market needs leaders. The current bull has been led by three primary groups: health care, defense, and glamour stocks (think Netflix (ticker: NFLX)), plus an assortment of Johnny-come-latelies such as retail and banks. If the market is truly healthy, then when one group falls back, the next steps up to take the lead.

So when both old and new leaders stumble at the same time, the market may be sending us a message that...